Barclays set to reveal capital requirements next week

Barclays is expected to announce on Tuesday next week whether it will need to raise more capital to meet a demand by the Bank of England that it reduces the risks it is running in its business.

Alongside its interim results, the bank is expected to disclose the outcome of detailed discussions with the Prudential Regulation Authority, an arm of the Bank of England, about increasing its leverage ratio – a measure of riskiness.

Analysts have calculated that Barclays could need to find £7bn of capital if the PRA requires it to increase its leverage ratio from 2.5% to 3% by the end of the year. However, the Financial Times reported that the PRA would decide to give Barclays until the end of 2014 to take action to increase the ratio – by cutting back on risk or increasing capital. This is later than expected but still earlier than the end of 2015 deadline Barclays had been aiming for. The additional time is expected to reduce the need to raise fresh capital from shareholders.

The PRA had asked Barclays to submit its plan on the leverage ratio by the end of June and promised an announcement by the end of July - which would coincide with the bank's results.